U.S. Fed Warns About 'Shadow Lending'

Report From New York Fed Highlights Expanding Role of Individual Investors

By

Ianthe Jeanne Dugan

Updated Oct. 7, 2013 8:44 p.m. ET

Debt-laden companies are on track to borrow a record $1 trillion this year in the nonbank "shadow lending" system, and regulators are sounding alarms about one of its fast-rising funders: individual investors.

The burgeoning role of individuals in lending is highlighted as a top concern in a report released last week by the Federal Reserve Bank of New York as part of a continuing effort to overhaul shadow bankers—the web of...